US dollar little changed in steady forex market

[NEW YORK] The dollar slipped a bit against the euro on Thursday but was overall little changed in a steady foreign exchange market.

The pound was stable against the greenback after suffering stiff losses earlier in the week amid the rising debate over whether Britain will vote to exit the European Union in June.

"After the big move in currencies at the start of the week there was a sense of calm today in the foreign exchange market," said Kathy Lien of BK Asset Management.

"Many of the major currencies licked their wounds and recovered their recent losses but we fear that there could be false sense of optimism in the market."

A pair of solid US economic reports contributed to the improved sentiment, she said. US durable goods orders jumped 4.9 per cent in January after two months of declines, while jobless claims continued to show the jobs market tightening.

Traders will be focusing on Friday's official data on US economic activity in the 2015 fourth quarter. The Commerce Department's second estimate of gross domestic product is expected to be revised sharply lower, to a 0.4 per cent annual rate, from the prior estimate of 0.7 per cent.

A downward revision could produce headwinds for the dollar and the Federal Reserve's plan to raise interest rates this year, said David Song, currency analyst at DailyFX.

"Even though the US approaches 'full-employment', a marked downward revision in the growth rate may undermine Fed expectations for a 'consumer-led' recovery, and the central bank may largely endorse a wait-and-see approach throughout 2016," Mr Song said.

AFP